View: Why India isn't wrong in restricting imports of PCs, laptops, tablets
domestic manufacturing is rightly placed. For nearly three decades from 1962 to 1988, car buyers in South Korea were forced to buy locally manufactured cars because the Korean government had imposed a ban on all imported automobiles till 1988 and the import of Japanese automobiles till 1998. Economist Ha-Joon Chang, in his book, Edible Economics, has talked about how until the early 1990, the Korean government made sure that Hyundai and other firms got access to high subsidised credits.
In fact, in 1973, the government threatened Hyundai Motor Company and other automakers that their licenses to produce cars would be revoked if they didn’t come up with their own models. Using its regulatory and financial power, the Korean government also put explicit and implicit pressure on foreign as well as local companies to increase the local content of their products so that domestic car-parts industries would develop. For all its ‘free enterprise’ message to the world, Chang calls the US, the inventor of the economic theory of ‘infant industry protection’.
The country ‘erected a high wall of protectionism to create the space for its young companies to grow, protected from superior foreign, especially British, producers in the 19th and early 20th century’. So, India’s move to curb imports to push local manufacturing should not be eyebrow-raising. Of course, one may argue that what South Korea got right in the 70s, India may not get in 2023.
Read more on economictimes.indiatimes.com
